Monday’s bond market has opened in positive territory, erasing part of Friday’s intra-day losses. The stock markets are mixed with the Dow down 7 points and the Nasdaq up 4 points. The bond market is currently up 6/32, but due to significant selling Friday afternoon, we will still see an increase of approximately .250 of a discount point if comparing to Friday’s morning pricing. If your lender made a sizable increase to rates Friday afternoon, you should see little change in this morning’s pricing or possibly even an improvement, depending on how much of an upward revision was made.
There is nothing of relevance scheduled for release today that has the potential to influence mortgage rates. The rest of the week brings us the release of three reports that do, in addition to the minutes from the most recent FOMC meeting and a congressional speaking engagement by Fed Chairman Bernanke. Only one of the economic reports is considered to be highly important to the markets and mortgage rates, but the others do carry enough significance to influence mortgage rates if they show a wide variance from forecasts.
Tomorrow also has nothing of importance scheduled, so look for stock movement to heavily influence bond trading and mortgage rates. Stock gains will probably pressure bonds and cause mortgage rates to move higher. If the major stock indexes show losses during the first couple days, we may see bonds thrive and mortgage rates remain unchanged or move slightly lower. It will also be interesting to see if last week’s pattern of afternoon selling in bonds carries into this week. Early gains in bonds this morning raises caution that it may. Therefore, proceed cautiously if still floating an interest rate and closing in the immediate future as the afternoon selling, for the most part, has been stronger than the morning buying. In other words, the afternoon revisions have been higher than the morning improvement s to rates.
Wednesday has three events that could affect mortgage rates. They include April’s Existing Home Sales report and Fed Chairman Bernanke’s appearance in front of Joint Economic Committee of Congress, both at 10:00 AM ET. That will be followed by the release of the minutes from the last FOMC meeting at 2:00 PM ET.
Overall, I believe Wednesday will be the most important day of the week for mortgage rates, although Friday should be active also as it has the most important economic report and will have an early bond market closing ahead of next Monday’s holiday. I don’t think we will see as much movement in rates that we saw last week, however, it is still recommended to maintain contact with your mortgage professional if you have not locked an interest rate yet since it could still be a fairly active week.